Pulling the levers

On March 10, Traton Chairman and CEO Christian Levin said his team at the maker of International, Scania and other trucks and buses would “have to be very swift” to react to changes in the macro environment. On April 28, he said Traton had cut a shift at its Mexico plant. Corporate C-suites aren’t hemming and hawing; their short-term outlooks and their investor bases demand action.

— Geert De Lombaerde 
 
• Truck maker cuts shift, 900 jobs in Mexico

• Dow delays $6.4B project amid tariff uncertainty

• Alcoa CEO: Tariffs not spurring plans to restart idled plants
 

Two themes to keep in mind

In addition to showing urgency about cutting costs, most of the leadership teams reporting their first-quarter earnings these days also have been confident and purposeful in thinking about what’s beyond those immediate moves. Among the themes I’ve heard emerge from recent calls: Executives are retaining their confidence in longer-term tailwinds and, even after accounting for some pull-forward spending, many parts of the economy were pretty solid early this year—a note that also showed in Wednesday’s preliminary Q1 GDP reading.
 
• 3M CEO: Team looking ‘very carefully’ at adding U.S. production

• ‘There’s going to be more activity here whether there’s tariffs or not’ – Thermo Fisher to invest $2B in U.S. manufacturing and R&D

• Old Dominion execs cross their fingers for a return of the ‘reacceleration’ of early this year
 

"What we are not seeing is [...] this massive build-up 
and drop-off and a holding pattern of projects
not being let. We are seeing the opposite.
And we're seeing these things come to fruition
because they're taking the deliveries."

That was Nucor Corp. leader Leon Topalian on his team’s April 29 conference call, where he was clear as day in pointing out that many of the long-term trends supporting the steel company’s business—think of the growth in energy, technology and roads-and-bridges infrastructure—haven’t disappeared. In addition, he said, what pull-forward spending there was earlier this year hasn’t created an air pocket in orders today.
 

Rethinking and navigating

Granted, there’s only so much solace in knowing there are likely silver linings beyond the current turbulence or that your organization can lean on many a lesson learned during the COVID upheaval. Things are still rough right now and, with or without a wave of new trade deals, they’re likely to get bumpier by summer after tariffs truly work their way through the system. Here are two stories that can help you reset and refine.
 
• Rethinking your strategy as trade models crumble

• Embracing pragmatism and communicating effectively are among the keys to navigating uncertainty
 

1,000

The number of stores Big Brand Tire & Service CEO Joe Buscaglia is targeting by 2030 for the PE-backed company that today has about 250 locations

Key to the chain’s recent growth and plans to quadruple is a “highly predictable M&A engine” that doesn’t discriminate between mid-sized targets and one- or two-store dealerships. People, processes and technology can win regardless of global turbulence.
 

What we'll be watching

During what remains of the Q1 earnings season, I’ll be listening for confirmations or rebuttals of the two themes I mentioned above. If they persist, an upcoming downturn is unlikely to be prolonged or very deep and would set the economy—including small businesses that don’t have as many levers to pull—back on track for growth. And on May 7, I’ll be tuning into IndustryWeek’s webinar featuring trade and manufacturing experts; they’ll have concrete advice on surviving and thriving in this radically changing economic environment. I hope you’ll join us.